Management Accounting Ch09
Quizzes and Glossary
Quizzes and Glossary
Set of flashcards Details
| Flashcards | 37 |
|---|---|
| Language | English |
| Category | Finance |
| Level | University |
| Created / Updated | 06.06.2021 / 03.02.2023 |
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Direct materials budget
An estimate of the quantity and cost of direct materials to be purchased.
Financial budgets
Individual budgets that focus primarily on the cash resources needed to fund expected operations and planned capital expenditures.
Long-range planning
A formalized process of identifying long-term goals, selecting strategies to achieve those goals, and developing policies and plans to implement the strategies.
Manufacturing overhead budget
An estimate of expected manufacturing overhead costs for the budget period.
Master budget
A set of interrelated budgets that constitutes a plan of action for a specific time period.
Merchandise purchases budget
The estimated cost of goods to be purchased by a merchandiser to meet expected sales.
Operating budgets
Individual budgets that result in a budgeted income statement.
Participative budgeting
A budgetary approach that starts with input from lower-level managers and works upward so that managers at all levels participate.
Production budget
A projection of the units that must be produced to meet anticipated sales.
Sales budget
An estimate of expected sales revenue for the budget period.
Sales forecast
The projection of potential sales for the industry and the company's expected share of such sales.
Selling and administrative expense budget
A projection of anticipated selling and administrative expenses for the budget period.
A budget:
The essentials of effective budgeting do not include:
The formula for the production budget is budgeted sales in units plus:
Budgeting is the process of establishing company-wide objectives that serve as a deterrent to waste and inefficiency.
The effectiveness of the budget program is directly related to its acceptance by all levels of management.
Budgeting always has the effect on human behavior of inspiring managers to higher levels of performance.
One disadvantage of budgeting is that it does not facilitate the coordination of activities within a business.
The sales budget is the first budget prepared and each of the other budgets depends on it.
The quantities of direct materials in the direct materials budget are derived from the formula: Desired Ending Direct Materials Units + Direct Materials Units Required for Production – Beginning Direct Materials Units = Required Direct Materials Units to be Purchased.
The manufacturing overhead budget shows only the expected indirect labor costs for the year.
The budgeted income statement indicates the expected profitability of operations for the next year and provides the basis for evaluating company performance.
Long-range planning differs from budgeting in the time period involved, emphasis, and the amount of detail presented.
Budgeting is not used in not-for-profit organizations because it is not necessary for these organizations to engage in profit planning.
A formal written statement of management’s plans for a specified future time period, expressed in financial terms is a(n)
Which of the following is not a benefit of budgeting?
All of the following are financial budgets except the
The master budget includes all of the following except
If required production units are 75,000, budgeted sales units are 65,000, required direct materials purchases units are 3,000, and beginning finished goods units are 5,000, then desired ending finished goods units would be
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